Jan 5, 2010

Google and the Supply Chain

Today, Google made a huge announcement. They launched a new phone, called the Nexus One in partnership with HTC and T-Mobile. But the hugeness and the excitement was not in the launch. As Google often does, the awesomeness is in the silent details. Google will be selling the phone thorough an “online retail” channel. What does that mean? The entire merchandising and logistics is going to be taken care of by Google.

You know, one of the things I’ve always wondered about was Why isn’t Google in the Logistics space? I mean, they’re certainly more than capable of writing software to route, schedule and track shipments. They have an impeccable maps software which if they could somehow automate, would give the best possible route taking into account a lot of factors. In a way, I have a hunch that Logistics is exactly what they’re going to be doing with the Nexus One. I was watching a Live Stream of the Nexus One launch and I heard someone ask a question about who was going to hold the inventories. Google’s VP of product development, Mario Carlos just avoided that question. Like with a lot of things that Google does, I think this secrecy is in fact a silent yes. If what I think is right, Google, in addition to opening an online store, will also be maintaining a physical inventory of phones which they will then distribute.

ANDROID PHONES:

We already know the fact that the Android phone community numbers about 18-20. This number is certainly going to increase in 2010 what with Motorola committing its enGoogleBtire Wireless division to develop android phones. Motorola alone expects to launch about 25 Android phones and Google has a steady partner in HTC which already has 7 Android Phones (including the Nexus One). Why am I talking about all this? I’m trying to drive home the point that Google wants its web page to become a landing ground for people to buy Android Phones. This means, they will certainly have more phones being sold through the online channel. Take an estimated 800000-1m Moto Droids that are rumored to have been sold from Oct 2009, multiply it by say 5-6 phones in 2010 and you have Google serving an impressive number of customers. Google might just do for mobile phones what Amazon did to book-buying.

THE SUPPLY CHAIN:

We also know that Apple drives a majority of its costs down by maintaining an extremely efficient supply chain. They were even acknowledged by AMR to have the best supply chain in the world. If Google does get into the supply chain game in a big way, I can’t help thinking of the wonderful things they could do to the supply chain with their culture of speed and efficiency combined with rapid innovation. There’s a winner for you already. I always thought Google’s culture was more suited for a Supply Chain Organization than for a software company. With the right tools, now that they have the right people (which is extremely important), Google might just be able to pull it off.

Now this post might seem like wishful thinking to many. But it probably is just ahead of its time. I foresee me writing about the same topic many times in the future. For now, I’m just hoping that Google does indeed start a Supply Chain Operation. That thought certainly attracts me.

For now, its good to know that I’m not the only one who thinks about Google and the Supply Chain. Here’s two articles that think about the Google way of running a Supply Chain.

Supply Chain Market Analysis: The Google Way

A Google approach to Supply Chain Management

Jan 5, 2010

Google and the Supply Chain

Today, Google made a huge announcement. They launched a new phone, called the Nexus One in partnership with HTC and T-Mobile. But the hugeness and the excitement was not in the launch. As Google often does, the awesomeness is in the silent details. Google will be selling the phone thorough an “online retail” channel. What does that mean? The entire merchandising and logistics is going to be taken care of by Google.

You know, one of the things I’ve always wondered about was Why isn’t Google in the Logistics space? I mean, they’re certainly more than capable of writing software to route, schedule and track shipments. They have an impeccable maps software which if they could somehow automate, would give the best possible route taking into account a lot of factors. In a way, I have a hunch that Logistics is exactly what they’re going to be doing with the Nexus One. I was watching a Live Stream of the Nexus One launch and I heard someone ask a question about who was going to hold the inventories. Google’s VP of product development, Mario Carlos just avoided that question. Like with a lot of things that Google does, I think this secrecy is in fact a silent yes. If what I think is right, Google, in addition to opening an online store, will also be maintaining a physical inventory of phones which they will then distribute.

ANDROID PHONES:

We already know the fact that the Android phone community numbers about 18-20. This number is certainly going to increase in 2010 what with Motorola committing its enGoogleBtire Wireless division to develop android phones. Motorola alone expects to launch about 25 Android phones and Google has a steady partner in HTC which already has 7 Android Phones (including the Nexus One). Why am I talking about all this? I’m trying to drive home the point that Google wants its web page to become a landing ground for people to buy Android Phones. This means, they will certainly have more phones being sold through the online channel. Take an estimated 800000-1m Moto Droids that are rumored to have been sold from Oct 2009, multiply it by say 5-6 phones in 2010 and you have Google serving an impressive number of customers. Google might just do for mobile phones what Amazon did to book-buying.

THE SUPPLY CHAIN:

We also know that Apple drives a majority of its costs down by maintaining an extremely efficient supply chain. They were even acknowledged by AMR to have the best supply chain in the world. If Google does get into the supply chain game in a big way, I can’t help thinking of the wonderful things they could do to the supply chain with their culture of speed and efficiency combined with rapid innovation. There’s a winner for you already. I always thought Google’s culture was more suited for a Supply Chain Organization than for a software company. With the right tools, now that they have the right people (which is extremely important), Google might just be able to pull it off.

Now this post might seem like wishful thinking to many. But it probably is just ahead of its time. I foresee me writing about the same topic many times in the future. For now, I’m just hoping that Google does indeed start a Supply Chain Operation. That thought certainly attracts me.

For now, its good to know that I’m not the only one who thinks about Google and the Supply Chain. Here’s two articles that think about the Google way of running a Supply Chain.

Supply Chain Market Analysis: The Google Way

A Google approach to Supply Chain Management